Hang Seng Index News: Tariff Fears and Tech Losses Weigh on Sentiment and Outlook

Hang Seng Index Tracks US Futures Lower on Tariff Headlines

President Trump announced updates to tariffs, triggering uncertainty about the timing of the reintroduction of US Liberation Day tariffs.

On Monday, July 7, the Hang Seng Index faced a three-day losing streak, with tech stocks dragging the Index into the red.

Key economic data, trade developments, and central bank policy guidance will remain the key market drivers. These factors may dictate whether the Index breaks below 23,500 or revisits 24,500.

Hang Seng Index Drops as Tariff Concerns Test Sentiment

US Futures were in the red on July 7, with the Nasdaq 100 down 102 points. The Hang Seng Index tracked US Futures lower, falling 0.37% to 23,827. Reports of the US administration planning to send more tariff letters out ahead of a new August 1 trade deadline fueled market uncertainty.

Mainland China markets also posted morning losses. The CSI 300 and Shanghai Composite Index declined by 0.47% and 0.12%, respectively. Beijing’s silence on fresh stimulus after last week’s Caixin PMI surveys and trade uncertainties left the pair in the red alongside the Hang Seng Index.

Tech Stocks Drop as Focus Shifts to Tariffs

The prospect of US tariffs remaining in effect for the foreseeable future weighed on the tech sector. Market sentiment toward the Fed rate path and the US-Vietnam trade deal added to the negative sentiment.

Tariffs and higher borrowing costs would likely affect tech stocks already facing intensifying margin squeezes. The chances of a September Fed rate cut slid from 91.4% on June 27 to 68.1% on July 3 on a hotter-than-expected US Jobs Report, supporting Fed Chair Powell’s wait-and-see policy stance.

A 40% tariff on goods transshipped through Vietnam to the US could impact Chinese exporters.

Alibaba (9988) slid 1.24%, while Baidu (9888) and JD.com (9618) dropped 0.23% and 0.48%, respectively, to leave the Hang Seng TECH Index down 0.46%.

Will Trump’s BRICS Tariff Shake the Market?

Reports of Trump threatening 10% tariffs on companies aligning with BRICS’ policies added another layer of market negativity on Monday, July 7. Trump announced:

“Any company aligning with the Anti-American policies of BRICS, will be charged an additional 10% tariff. There will be no exceptions to this policy.”

The announcement followed updates from the US administration on trade negotiations and tariffs.

Trump announced more letters will go out on Monday, Tuesday, and Wednesday, with most countries set for a trade deal or letter by July 9. Meanwhile, US Commerce Secretary Howard Lutnick reportedly stated:

“Tariffs go into effect August 1, but the president is setting the rates and the deals right now.”

Trade deals could mirror the US-Vietnam agreement, potentially targeting China, which would have a greater impact on China’s trade terms and economy. The China Beige Book remarked on China’s post-tariff export trends, stating:

“The value of Chinese exports to the US dropped 43% YoY in May, but the country’s overall exports rose by 4.8% in the same period, official Chinese data showed, as the shortfall in trade w/the US was offset by a 15% jump in shipping to ASEAN & 12% rise to the EU.”

Export trends to ASEAN countries underscored the potential impact of punitive trans-shipment levies on demand for Chinese goods.

Technical Setup: 24,500 Resistance or Drop Below 23,500?

On July 7, the Hang Seng Index remained within the May-June congestion zone. However, despite the extended loss, the Index remained above its 50-day Exponential Moving Average (EMA), indicating a bullish bias.

Easing trade tensions or stimulus cues from Beijing could drive the Index toward the 24,000 level. A sustained break above 24,000 could bring the June 25 high of 24,533 into play, paving the way to the March high of 24,874. Conversely, a break below the 50-day EMA and the 23,500 mark could push the Index toward the crucial 23,000 support level.

Hang Seng Technical Outlook

• Resistance: 24,000, 24,533, and then 24,874.
• Support: The 50-day EMA at 23,524, then 23,000.
• Short-term Bias: Bullish but dependent on trade developments, upcoming Chinese economic data, and central bank policy guidance.

Hang Seng Index Forecast: Will the Index Break 24,500 or Drop Toward 23,000?

The Hang Seng Index fell back to its congestion zone while trading above the 50-day EMA amid shifting sentiment toward US tariffs and levies on trans-shipments.

Despite the recent easing of restrictions on US and Chinese exports, the US-Vietnam trade deal highlighted the US administration’s intent to target regional demand for Chinese goods. Worsening overseas demand may further pressure China’s corporate profits and labor market.

Existing US tariffs and Beijing’s silence on fresh stimulus remain headwinds that could potentially push the Index below 23,500. Conversely, the removal of tariffs or new stimulus may boost sentiment, driving the Index toward the March high of 24,874.

What’s next for the Hang Seng? Stay informed with real-time updates as geopolitical risks and US-China developments drive sentiment. Follow our live coverage and consult our economic calendar.